Apple Just Issued A Stunning $12 Billion Blow To Facebook

Apple’s new privacy features continue to hit Facebook as increasing numbers of iPhone users opt out from tracking on their devices. One year on from its launch, in another stunning blow to Facebook, it seems the revenue hit is going to be even bigger than previously thought. According to a new analysis, the iPhone maker’s App Tracking Transparency (ATT) features will cost Facebook $12.8 billion in 2022.

In February, I reported how Apple’s ATT privacy features launched in iOS 14.5 would cost the social network upwards of $10 billion. As iPhone users start to care more about privacy, and Apple CEO Tim Cook continues to push the area in the firm’s marketing, increasing amounts of people are saying no to tracking on their iPhones. This is causing a drop estimated at around 15% to 20% for advertisers on iOS.

Apple’s ATT changes will by far impact Facebook the most, according to the new data issued by Lotame. Lotame predicts a $16 billion revenue impact, of which YouTube will see a hit of $2.2 billion, compared with $546 million for Snap and $323 million for Twitter.

The ATT iPhone privacy features restrict app tracking by revoking access to the identifier for advertisers (IDFA), the unique code assigned to each user. Apple can police this on a technical level because when you say no to tracking, advertisers receive a string of zeros instead of the code.

But is Apple’s ATT as good as it seems?

Yet even since its inception, some crafty developers have unsurprisingly been trying to get around Apple’s privacy features—highlighted by anti-tracking app Lockdown Privacy which called ATT “functionally useless” last year. Now, another study has shown how loopholes in Apple’s ATT framework can allow large firms such as Facebook and Google to collect large amounts of first-party data, as reported by Ars Technica.

“Our findings suggest that tracking companies, especially larger ones with access to large troves of first-party data, still track users behind the scenes,” the researchers wrote. This happens through a range of methods, they say, including using IP addresses to link installation-specific IDs across apps and “through the sign-in functionality provided by individual apps such as Google or Facebook sign-in, or email address.”

“Especially in combination with further user and device characteristics, which our data confirmed are still widely collected by tracking companies, it would be possible to analyse user behaviour across apps and websites (i.e. fingerprinting and cohort tracking),” the researchers said. “A direct result of the ATT could therefore be that existing power imbalances in the digital tracking ecosystem get reinforced.”

Given that the iPhone privacy features are hurting revenues in the billions, ATT is certainly working to an extent. There will always be developers who try to get around the iPhone maker’s rules, so perhaps that aspect could be policed a little better, and loopholes closed by Apple. Apple’s ATT certainly isn’t perfect, but at a time when people care about the data-hungry habits of Facebook and others, it’s a start.